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Why Spotify is preparing to compete beyond music: CEO

Spotify founder and CEO Daniel Ek said Wednesday his company is not just competing against music streaming sites such as Pandora and Apple's Beats Music. He also has to take on Instagram.

The Swedish music company has no plans to enter the photo-sharing space, but Ek said Spotify must think about how its users spend their time across all platforms.

"I think we're really competing over time with really all of these apps ... not just Pandora, not just Apple, but something such as an Instagram for time," he told CNBC's "Squawk Alley" on the sidelines of Re/code's Code Conference in Rancho Palos Verdes, CA.

Spotify announced recently it would expand the scope of its streaming services by partnering with content providers such as the BBC and Comedy Central to deliver video through its platform.

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Ek singled out photo-sharing app Snapchat, which has recently moved into news content, as an example of how the digital and mobile space is evolving.

"Very similarly with Spotify—we're obviously a media company, but what we're really, really thinking about is how do we serve our customers," he said. "It turns out that these customers don't necessarily want to jump through 20, 30, 50 apps, but actually want to have a broader sort of entertainment offering within Spotify itself."

In addition to video, Spotify will offer podcasts and integrate more traditional radio elements into its playlists such as weather and traffic updates in order to better accommodate its users during relevant points in their day, such as their morning commute. It also partnered with DJ Tiesto to create a feature stocked with music tailored for runners.

"When we're looking at what our customers are saying to us, it's really about finding more moments in their day, finding better soundtracks for those moments, and that's been a huge part of this push that we launched last week, as well," Ek said.

Spotify currently has more than 60 million active users, about 20 percent of whom are paying subscribers (the others listen for free to ad-supported streams).

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Asked how Spotify was able to stay competitive with formidable players that have entered the space, including Apple and hip-hop mogul Jay-Z, who recently launched a service called Tidal, Ek said Spotify continues to experiment to achieve better outcomes.

"The key here is we live in this world now where we have tremendous access to data," he said. "We're constantly trying to move forward with better product offerings, with better programming, with better curation. It's really about moving faster than the rest, and I really feel we're doing a pretty good job at it."

As for Spotify's sometimes contentious relationship with musicians regarding royalties, Ek acknowledged the industry has gone through multiple transitions in recent years, first from physical to digital media, and then from purchasing music to streaming it. Some recording artists have criticized Spotify for contributing to the erosion of their earnings.

Ek said that as smartphone adoption continues to expand around the world, people will gravitate toward streaming music, creating a billion-plus user base.

"There's going to be a multitude of business models that will try to address them, but if you do that, the entire music industry will be much bigger than it's ever been—even than in the past glory days," he said. "In that world, artists are of course going to make even more money."

—CNBC's Ken Underwood contributed reporting to this story.